SFDR Overview

SUSTAINABILITY RISK POLICIES

Pursuant to the Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (“Sustainable Finance Disclosures Regulation” or “SFDR”), a sustainability risk is defined as “an environmental, social or governance event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of the investment”. In the context of Freeport, sustainability risks, referred to in our ESG Policy as financially material ESG risks, (together with ESG opportunities referred to as “ESG Factors”), include those that have the potential to impact the operational or financial performance of a company, and ultimately, the Freeport portfolio.

Prior to making an investment, Freeport undertakes initial due diligence, which seeks to evaluate the investment’s suitability for Freeport’s advisory clients. As part of this review, Freeport endeavors to identify the material risks associated with each prospective investment and its private equity sponsors (“PE Partners”). This includes relevant and material ESG risks. Freeport seeks investments in companies that operate in stable industries and are not generally expected to be susceptible to reputational and headline risk.
Our evaluation of risk begins with an overall assessment of the likely risks associated with an investment, as generally disclosed in the relevant fund’s investment policy and objectives. This is supplemented by the evaluation of data collected through Freeport’s ESG Questionnaire, which is focused on uncovering those risks and opportunities most likely to be relevant to the investments Freeport makes.

The Co-ESG Officers and Investment Committee assess all risks identified during diligence, including ESG risks, alongside other relevant factors. A summary of the ESG diligence process is included in a report provided to the Investment Committee. Following this review, the Investment Committee makes an investment decision based on each respective fund’s investment policy and objectives.

Following investment and throughout the investment holding period, Freeport will seek to review updates on ESG performance from our investments and PE Partners on an ongoing basis.

Please contact Freeport’s Co-ESG Officers if you have any questions on our approach to integrating ESG Factors throughout the investment process.

NO CONSIDERATION OF PRINCIPAL ADVERSE IMPACTS

Freeport does not consider the principal adverse impacts of its investment decisions on sustainability factors in the manner prescribed by Article 4 of the Disclosure Regulation.

Article 4 of SFDR requires fund managers to make a clear statement as to whether they consider the “principal adverse impacts” of investment decisions on sustainability factors. While Freeport acknowledges the potential impacts of ESG Factors on our investments, it uses its own procedures, policies and metrics to assess its investment decisions, including any adverse impact(s) that may be material to review as part of its diligence or investment management processes. Our procedures and policies, which are tailored to the investments made on behalf of our advisory clients, do not align with those prescribed under Article 4 of SFDR.

Accordingly, Freeport does not currently intend to consider the prescribed adverse impacts of our investment decisions on sustainability factors within the meaning of Article 4 of SFDR; however, Freeport will review these requirements on an on-going basis.

REMUNERATION POLICY

SFDR requires Freeport to include in its remuneration policy information on how its policy is consistent with the integration of sustainability risks.

Freeport pays staff a combination of fixed remuneration (salary and benefits) and variable remuneration (including bonus). Variable remuneration for relevant staff takes into account compliance with all Freeport’s policies and procedures, including those relating to the impact of sustainability risks on the investment decision making process.